In Focus

Registrar can depute ‘flying squad’ to examine accounts

By Gajanan Khergamker

Every cooperative housing society should have their books of accounts audited at least once every cooperative year. Auditing is the verification and examination of books of accounts regularly audited by a statutory auditor.

The Registrar of societies also has the right to enforce additional audits at any time of the year according to his discretion. Housing societies can approach an auditor from the panel of auditors maintained by the Registrar or by a chartered accountant who holds a certificate in cooperative audit issued by the institute of Chartered Accountants in India.

An audit generally includes the examination and verification of the following points:
a) Overdue of debts, if any;
b) Cash balance and securities valuation of the assets and liabilities of the society;
c) Whether loan, advances and debts made by the society on the basis of security have been properly secured and the terms on which such loans or debts are incurred are not pre-judicial to the interest of the society and its members;
d) Whether the transactions of the society which are presented merely as book entries are not pre-judicial to the interest of the society;
e) Whether personal expenses have been charged to the revenue account;
f) Whether the society has incurred any expenditure in furtherance of its objects;
g) Whether the Managing Committee is taking proper care to deposit the share money collected from the members specified securities or long-term deposits as specified in the Bye-laws.
h) Whether the Cash on hand is exceeding the limits prescribed in the Bye-Law number 143. While it is necessary for the society to maintain a minimum cash balance, the treasurer or secretary should always deposit additional cash into the bank.

The Registrar may on his own or on the urging of interested parties depute a ‘flying squad’ to examine the books, records, accounts and any other society papers to verify the society’s cash balance. During this period, the Registrar or an officer deputed by him can ask any person who is or has been at any time an officer or employee of the society or any past or present member of the society to furbish information regarding the transactions and working of the society.

If during the course of an audit, the auditor believes that some books of accounts or other documents contain any incriminatory evidence against past or present officers or employees of the society, the auditor can immediately report the matter to the Registrar.

The auditor can also, with previous permission from the Registrar, impound the books or documents after giving a receipt thereof to the society.

To avail a legal service, an expert opinion or an appointment with Solicitor and Property Law Expert Gajanan Khergamker, call 8080441593